In the good news department: Chevron Canada Resources said thatits reported natural gas production volumes from its Fort LiardK-29 well in the southwestern part of the Northwest Territories areabout 25 MMcf/d more than it had estimated.

Chevron determined this week that the well actually wasproducing gas at 85 MMcf/d between Sept. 9 and Oct. 3, not 60MMcf/d as it had reported during the month of September,attributing the erroneous data to a flow calculation error. It saidit was investigating ways to ensure it does not happen again.

Chevron holds a 43% stake in the well and is the operator.Partners include Purcell Energy Ltd., Berkley Petroleum Corp.,Anderson Exploration Ltd. and Paramount Resources Ltd.

Chevron said the gas-water ratio actually is nine to 10 barrelsof water to each million cubic feet of gas at a flow rate of 85MMcf/d. It had been reporting 13 barrels of water to each millioncubic feet at 60 MMcf/d in September. The volume of water producedalong with the gas was actually much less than the flow calculationhad determined. The well was shut-in on Oct. 3 for routinescheduled corrosion inhibition and then was restarted on Oct. 4 andthe problem was discovered at that time.

According to Chevron spokesman Charlie Stewart, “earlyindications” are that the flow calculations now are correct, but hesaid the company wants to have a “bit of sustained productionperformance” to be sure the gas-water ratio has been corrected. Itexpects to have production back to 75 MMcf/d by today, the rate itwas producing when it started last year.

The well is in an area that has been called one of Canada’slargest onshore gas discoveries, and Chevron made the K-29discovery in the spring of 1999. The news could not come at abetter time for Purcell, which holds a 24% stake in the project.Two weeks ago, shares of the Canadian company were stopped afterfalling for several days. Purcell management said at the time thatthe well was pumping more water than expected but called thesituation manageable.

“We thought it was doing the speed of a Volkswagen and actuallywe had a Lamborghini,” said Purcell’s COO Bruce Murray.

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